Recently, as the national steel production restriction has accelerated, iron ore futures prices have continued to drop. As of the close of the domestic futures market on the afternoon of August 10, the main iron ore contract closed at 853 yuan/ton, down 1.33%, and the lowest intraday hit 823 yuan/ton, a record low in the past 9 months.
According to industry insiders, under the requirement of steel production restriction, the operating rate of national steel enterprises and the daily output of crude steel have continued to decline since July, and the demand for iron ore has been sluggish. In the future, specific measures to reduce crude steel production in various regions will be accelerated. Many steel companies have planned to reduce production raw material inventories. Coupled with the optimistic delivery of imported iron ore, it is expected that iron ore prices still have room for a downward trend.
Since mid-June, many regions have begun planning and deploying the reduction of steel production in the second half of the year to ensure that crude steel production in 2021 will fall year-on-year. A reporter from the Shanghai Securities News learned that recently, measures aimed at restricting and reducing production by steel companies in many places have been implemented. Shanxi Province has carried out production reduction work in “2+26” cities (the Beijing-Tianjin-Hebei air pollution transmission channel cities), involving Taiyuan, Jincheng and Changzhi.
Tangshan, a major steel town, continues to limit production by steel companies. According to the latest production restriction notice of Tangshan City, in addition to Shougang Qiangang, Shougang Jingtang and other steel companies, 19 steel companies continued to implement the 30% total emission reduction requirements, and 3 companies including Xinda Steel failed to complete the annual governance tasks on schedule. Steel companies’ total emission reduction measures will be tightened by 10% until all governance tasks have been completed.
Major steel companies actively implement production restrictions. China Baowu General Manager Hu Wangming stated at the 2021 second quarter work conference on August 6 that he will resolutely implement the “restriction order”, reasonably decompose crude steel production indicators, resolve the pressure on production and sales balance, and actively study and judge the indirect impact of production restrictions. .
A person from a large-scale steel company in Liaoning said that it has received a notice to reduce production, and most local steel companies will adopt the expansion of the maintenance plan to complete the production reduction target.
Li Xinchuang, vice chairman of the China Iron and Steel Association and Secretary of the Party Committee of the Metallurgical Industry Planning and Research Institute, said that the reduction of crude steel output is conducive to reducing the demand for iron ore market and has a positive effect on stabilizing iron ore prices in the short term. However, in the long run, it is still necessary to establish a long-term mechanism to improve the security level of my country’s industrial chain supply chain in order to fundamentally solve the problem of iron ore being restricted by others.Return to Sohu to see more
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